Knapp Nextcard Case

Case 5.8 NextCard, Inc. 1.Should meeters pronounce the steadiness of a clients commerce coif? Defend your answer. Auditors should not evaluate the soundness of a clients line of character model. They are not ask to withdraw knowledge and expertness to start and contain a successful line of merchandise. A business model is usually evaluated by a bank or other monetary asylum that the gild acquires capital from. An meeter is required to uphold integrity and has a responsibility to the stockholders to state competence and independence. All of this essential be achieved while examining sufficient, disposed(p) indicate to obtain reasonable impudence as to the cloth candidness of the clients financial statements. This evidence supports what has happened thereof far in the clients business. A business model is a prediction of what is pass opinion for the business by optimistic, dark counseling, not what has happened in the past. An auditors designing does not include predicting the start-up hereafter of a business, nor to rule fill in out of the closet tarradiddle. 2.Identify and short describe the specific fraud take chances factors present during the 2000 NextCard audit. How should these factors have affected the planning and carrying out of that engagement?

There were umteen risk factors present during the 2000 NextCard audit: unusually rapid issue and profitability, significant related-party transactions, poor or change state financial terminal figure when management guarantees debt, and management uses aggressive tommyrot measures to boost stock price. NextCard, integrated respectively demonstrated these risks as: extending $1 billion of credit to its customers with an average balance of $2000, executives sold-off bad portions of their ownership interests in the company before the financial tally became apparent, in 1999 the company produced a sine qua non of $77.2 billion followed by a $81.9 billion loss in 2000 and NextCards executive chose to hide the companys financial problems, and the management materially...If you want to get a ample essay, order it on our website: Ordercustompaper.com

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